carjam, it has been a while and I am not a lawyer. The basic difference is that with an LLC enables to you to avoid paying both corporate income tax AND personal income tax. Your account should be able to give you the advice you need to make the right decision.

An LLC is not required to hold annual meetings or to keep formal minutes, while an S Corporation is required to do so.

LLC members can split profits/losses in any way they choose. In an S Corporation, shareholders must receive dividends according to the number of shares that they own, regardless of the amount of effort put into the business.

An LLC can be owned by any combination of individuals or business entities. Only United States citizens and resident aliens may own an S Corporation .Other entities generally may not own an S Corporation.

S Corporation shareholders pay Medicare and Social Security tax only on money received as wages or salary, but not on profits received as dividends or that stay within the company. Under certain conditions, LLC members may need to pay Social Security and Medicare taxes on the entire amount of LLC profits.